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$594,000 a year? Some police chief salaries boosted with 'cashouts'

Some police chiefs and other top municipal officials in California received hefty pay in their last years in office because of so-called employee "cashouts," records and interviews show.

Cashouts of unused time have long been a controversial issue in local governments because they can significantly increase the compensation of employees, especially top executives. Many cities have placed limits on how much general employees can accrue, but those rules don't always apply to top managers or workers who started before the caps were instituted. That leaves hundreds of high-ranking officials able to build up hefty compensation.

Supporters say the system provides an incentive for diligent work habits; it also enables public agencies to avoid situations in which their employees skip work simply because they don't want to lose their vacation hours.

But in the extreme, the system inflates the compensation of top managers beyond what is noticeable to the public or even elected officials, said Geoff Rothman, a consultant at the Public Law Group, a San Francisco firm that advises cities on labor issues.


"If you don't drill down reading the benefit statements and resolutions, you'll miss it," Rothman said. "Often city council people or members of boards won't realize it until a big, huge check has to be written."

But when El Monte Police Chief Thomas Armstrong stepped down last year, he was paid nearly $430,000. The payday was possible thanks to a clause in Armstrong's contract that allowed him to accrue unlimited sick and vacation hours and sell them back to the city at the end of his career. By the time he retired at age 56, Armstrong had amassed a bank of more than 1,500 unused hours, city officials said, which he cashed out for roughly $200,000.

And he's not alone. Similar payouts have been made in city governments across the state. A database published by the state controller shows 23 city employees who made more than $400,000 in 2009 or 2010. The Times found that more than half had their total pay boosted through a sick- or vacation-time cashout.

Those employees include Roy Campos, Downey's former police chief, who was paid $594,000 in 2009 after cashing out more than 3,300 hours of unused sick and vacation time. The same year, Monterey Park's outgoing chief, Jones Moy, earned $531,000, including cashouts of about 2,700 unused hours. In 2010, Santa Clara's police chief, Steve Lodge, left his job with almost $600,000 in total pay thanks to a variety of cashouts.

In contrast, Los Angeles Police Chief Charlie Beck earned $297,000 last year and Los Angeles County Sheriff Lee Baca made $334,000.

Julio Morales, a former municipal financial consultant who was hired to be El Monte's finance director in 2009, said the back-end payment methods were favored by some city councils because they are less noticeable to the public than straight salaries.

The city is now trying to "clean up" compensation structures that enabled the payouts, Morales added, but is still liable for about $6.5 million in unused sick and vacation time accrued by current employees.

In an interview, Armstrong acknowledged the benefit package he received was "very gratuitous" and said the city should change its compensation system.

"These were contractual obligations in place for police chiefs for over 30 years," Armstrong added. "We played by the rules."

But Armstrong refuted the notion that city politics played a role in his compensation, saying he simply asked for the same contract his predecessors had received. He also pointed out that he took a 10% salary cut in 2009.


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-- Sam Allen

 
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